Forecast: Semiconductor Market On Verge Of Downturn, Maybe

Don't be fooled by the apparent strong sales of semiconductors, says an industry forecasting firm that instead suggests a downturn may actually be in the offing. Advanced Forecasting Inc. (AFI) says that double bookings of semiconductor orders and comparisons with sales during the recession of 1998 are likely presenting a rosier picture of the market than actually exists. "Some of the good feeling attributable to the mushrooming backlog may be unfounded if that backlog is based on double bookings," says AFI President Moshe Handelsman. "We are maintaining 'cautious pessimism' because our quantitative models are indicating that things may not be as rosy as many think." The firm states that next month's measures of several key economic factors will determine whether its "cautious pessimism" gives way to a stronger warning.